Wednesday, August 19, 2009

Bears Still Bearish

From Nouriel Roubini's non-subscription Email, just in case you're wondering what he's emphasizing:

H2 2009 Pick-Up in GDP Growth a Temporary PhenomenonAuto Sector Impact OverstatedA Smaller-than-Expected Boost from InventoriesResidential Investment to DisappointW-Shaped Impact of Fiscal StimulusNo Signs of Consumption RevivalWeak Outlook for Private InvestmentConsumer Retreat Will Be StructuralHigher Structural UnemploymentLess Credit in the EconomyCorporate Restructuring Will Hit Productive InvestmentPublic Sector Will Be a Drag on GrowthRebalancing GrowthHe forgot to put on his happy face yet another day!And over at Breakfast with Dave today, Dr. Rosenberg continues to emphasize the deflationary current trends, though he's both short-term optimistic on Treasuries--thinking that a break below 3.40% on the 10-year could quickly bring on a move to 3%-- and bullish long-term on gold.

So the bears continue to stick to their guns as most of the world emphasizes growth.

Roubini has not really been proven incorrect yet in his economic forecast, though he erred in forecasting the current stock move as just another brief fake-out.

Meanwhile, amongst the defensive stocks, the yield-minded and the technically-minded may want to look at Bristol-Myers Squibb, BMY. Unlike most of the other big guys in its field, it bottomed in the fall, not March, and a quick look at the chart suggests upside to 24 (where I would take profits). Note this stock usually moves very sluggishly, and definitely has downside risk in a general sell-off. Not to mention political considerations as always.

Interesting times, with a sense that more pros are exiting this stock market.